Capital, coal, and change: modelling India's energy substitutability with a translog production framework

Tanzeem Hasnat and Umer Jeelanie Banday
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Tanzeem Hasnat: Lal Bahadur Shastri Institute of Management, India
Umer Jeelanie Banday: Indian Institute of Technology Delhi, India

Theoretical and Applied Economics, 2025, vol. XXXII, issue 3(644), Autumn, 31-52

Abstract: This study employs a Transcendental Logarithmic Production Function to analyze the substitutability among capital, labour, coal, and oil in India's economy from 1991 to 2023. Utilizing ridge regression to address multicollinearity, it reveals that all inputs positively contribute to output, with significant substitution possibilities among them—especially capital-coal, labour-oil, and coal-oil. The findings highlight the potential of technology-driven capital investment and skill development in enhancing energy sustainability. Policy implications emphasize the need for targeted energy pricing, investment in energy-efficient technologies, and strategic energy diversification to align economic growth with environmental sustainability.

Keywords: energy consumption; economic growth; fossil fuels; production function; India. (search for similar items in EconPapers)
Date: 2025
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